An increasing number of Americans in Minnesota and across the country are choosing to divorce at an older age. Often called “gray divorce,” more people are divorcing over the age of 50 than at any time in the past. These divorces come with unique challenges, especially when they reflect the end of long marriages stretching over decades rather than shorter second or third marriages. In particular, people may be very concerned about how divorce will affect their retirement plans, given the limited amount of time remaining to compensate for the changes that can come with a financial divorce settlement.
The financial effects of divorce often persist long after the emotional and practical issues have been settled. When a gray divorce is involved, this often means restructuring one joint retirement plan into two separate plans. These financial concerns have not stopped the growth of gray divorce; the rate of divorce for people over 50 has doubled since 1990, and it has tripled for people 65 and older. While many gray divorces involve shorter second marriages, around half involve long-term partnerships with significant financial entanglements.
Experts note that divorce is one of the leading threats to financial independence, so it is important for older people getting a divorce to put in place a plan to protect their future. Each spouse may benefit from obtaining independent financial as well as legal advice to develop a plan for their retirement. Many people may find themselves delaying retirement as a result.
In most cases, a couple’s retirement funds will be divided approximately in half depending on the duration of their marriage. However, the settlement may vary from couple to couple. In all cases, a family law attorney may help a divorcing spouse negotiate for a fair settlement on property division, spousal support and related matters.